Business | General
Companies slash travel expenditure
Companies are cutting back sharply on the amount they spend on travel, according to three new surveys - in spite of warnings that travel bans in the manufacturing industry may be hampering British exports.
- By Kiran Stacey and David Fickling, Financial Times
- Published: 23:04 February 10, 2009
Companies are cutting back sharply on the amount they spend on travel, according to three new surveys - in spite of warnings that travel bans in the manufacturing industry may be hampering British exports.
One in five businesses plans to implement an outright ban on their employees travelling abroad, according to research carriedout by the Institute of Travel Management (ITM).
Meanwhile, 47 per cent of executives will be taking fewer trips in the next 12 months, according to the Economist Intelligence Unit, while 38 per cent of business travel buyers told the Business Travel Show that they would have less to spend this year.
The findings come as professionals in the export industry warn that travel bans could be stopping British manufacturers from setting up contracts to sell their goods overseas.
"Combined with other problems facing exporters, I hear that senior exporters have got a travel freeze on and this is one of the reasons exports are not picking up as the pound falls in value," said Susan Ross, director of Aon Trade Credit.
"Businesses are suffering a lack of sales, a lack of credit,
increased bad debts, etc., domestically and are needing to concentrate on managing those businesses. Since winning export sales requires more investment, this is likely to be under pressure," she said.
Hugh Bailey, director of the British Exporters Association, also said travel bans appeared to be reducing companies' exports, al-though a global decline in demand was a more serious issue.
The surveys' figures are the latest sign of businesses aggressively cutting costs to cope with the recession and they are bad news for the business travel sector.
Forty seven per cent of those surveyed by the ITM said they were negative about the future of the global business travel sector in the next one to two years.
"Our clients are still travelling but nearly all of them are looking to save money," said David Radcliffe, chief executive of business travel company Hogg Robinson.
"There are some who are going to the extreme and saying that
any travel has to be signed off by a board director, others who are saying that for travel above a certain cost," he said.
Several "business-class only" airlines have gone bust in the last couple of years, including Silverjet and Eos, the US carrier.
But the problems facing the executive travel industry have provided a fillip for other industries.
Regus, which rents out office space, said last week that video conference bookings have risen from 1,300 to 2,500 a month
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